Say Federal Red Tape Is Delaying Sandy Recovery

City Reps Want Fiscal Hurdles Cleared

Sen. Kirsten Gillibrand led New York City’s entireCongressional delegation in urging Housing and UrbanDevelopment (HUD) Secretary Shaun Donovan to cutbureaucratic tape within the Community Development BlockGrant (CDBG) program that hinders the city from providingHurricane Sandy recovery aid to businesses, homeowners,and displaced residents who desperately need relief but arecurrently ruled ineligible for aid.

The bipartisan, bicameral group of Congressional members called for three key HUD reforms in an effort to lift unnecessary barriers to the CDBG-Disaster Recovery program:

• Allow New York City homeowners who were approved for, but did not accept, Small Business Administration (SBA) loans to become eligible for CDBG grants to meet their recovery needs.

• Eliminate the need for environmental reviews for homeowners eligible for CDBG funds to expedite home repairs and rehabilitation.

• Relax strict requirements under the FEMA Disaster Housing Assistance Program (DHAP) in order to meet the needs of the city’s most vulnerable families.

Gillibrand, along with all of her colleagues in New York City’s congressional delegation, wrote in a letter to Secretary Donovan, “We have heard from our constituents that there are regulatory requirements that are impeding the city’s ability to repair homes and provide shelter for those in need. This includes a denial of benefits for those who have been approved for U.S. Small Business Administration (SBA) loans, and a requirement for individuals to comply with State environmental standards in order to get reimbursed for repairs. In addition, the eligibility requirements for the Federal Emergency Management Agency (FEMA) Disaster Housing Assistance Program (DHAP), which was created to help those who do not qualify for traditional housing assistance programs, are so restrictive that they have resulted in less than one percent of applicants being approved. We ask that you review these regulatory requirements and waive or alter them as needed to ensure that homeowners are receiving consistent and effective assistance during this recovery.”

Last month, New York City launched “NYC Build it Back,” a CDBG program that assists homeowners, landlords and tenants across the five boroughs whose homes were impacted by Superstorm Sandy. “NYC Build it Back” is funded with approximately $720 million in Federal disaster recovery funds passed by Congress earlier this year, which included an initial $1.77 billion CDBG-Disaster Recovery allocation through HUD.

Under current federal rules, city homeowners who were approved for Sandy-related SBA loans, but then decided not to take them, are now ineligible for funding under the “NYC Build it Back” program. Additionally, homeowners who experienced damage to their homes that resulted in losses greater than half the value of the home must undergo an environmental review.

Under HUD rules, however, “NYC Build it Back” can only conduct retroactive environmental reviews for repairs if the cost is less than 50 percent of the value of the home, leaving many homeowners ineligible for federal aid and paying out-of-pocket for repairs.

The bipartisan group also pointed out that eligibility requirements under the DHAP program are too strict and not aiding the residents that the program intended to help.

According to statistics provided by the city, only an estimated 25 out of the 7,000 applicants to date are currently eligible. These residents have already shown that they do not qualify for traditional FEMA Rental Assistance—either due to extremely low income, long-term housing need, or lack of long term housing options, but still have to meet the same requirements under the DHAP program.

The city's Congressional members urged the federal agency to swiftly review these regulations that have caused denied critical benefits to Superstorm Sandy victims and to change or waive the policies as needed in order to continue the effort to rebuild and revitalize communities hit hardest by the storm.